Have you ever heard the phrase “vote with your dollar”? What does it really mean? Sure, you don’t want to support companies and brands whose core values conflict with yours, but did you know it goes far deeper than that? Voting with your dollar is one of the only ways to force real change in industry. Let’s unpack that in this article.
What does it mean to vote with your dollar?
Voting with your dollar is spending your money on products from companies whose values align with your own. Even if you do not know anything about a company, when you purchase from that company you are supporting their business practices – ethical or not. This is why it is so important to be an informed consumer and to understand how the products you purchase are made.
Why does voting with your dollar matter?
Many developed countries in the world operate in varying levels of capitalism, with one of the most extreme examples being the United States. In a capitalist society, we have a free market economy where all companies have the ability to compete with each other for shares of the market. This is a great way to ensure prices are driven down as low as possible for the consumer. Sounds like a sweet deal right?
Cheap stuff sounds like a great thing at face value. Who doesn’t love a bargain? But here’s the problem – The cheapest product is rarely the most ethical or sustainable.
What this all boils down to is the way that companies choose to manufacture their goods. Companies such as the Dollar Tree and Forever 21 opt to create and sell the cheapest possible product. How are their products so cheap, you ask? Often times, by exploiting workers in developing countries.
Cheap Products and Exploitation of Workers
Exploitation of workers is one reason why we hear environmentalists and social justice warriors plea for us to stop supporting fast fashion and stores that sell poorly made products. Most of the time, employees of said companies are located in countries with labor laws that do not protect them from being paid unbelievably low wages. (For example, workers in Bangladesh make an estimated 33 cents an hour.) They work long, grueling days and live in extreme poverty.
It may be hard to imagine, but sweat shops still exist. Worse still, we consume products made in them regularly in developed countries like the United States. Take a moment and think about your last trip to any dollar store and you bought a non-food item. What did you buy? How long did you use it? Was it a single use product? Was it poorly made and clearly not meant to last a long time? All of these are signs that the product you bought was made by someone who is being paid far below a living wage.
Cheap Products and Unnecessary Waste
Now that we know the creation of bulk, cheaply made products is clearly not an ethical practice, let’s talk about how it is also not sustainable or environmentally friendly. When products are so cheap to make, they are often overproduced and extra items that do not sell are thrown away before ever being used.
Similarly, when consumers buy cheap products, we often opt to toss them out the moment they start looking ragged or we don’t need them anymore. Furthermore, every product ever made has a carbon footprint because of the energy it takes to make it. (Remember, most electricity is made by burning natural gas which creates carbon dioxide emissions!)
We have a culture of mindless consumption in the United States, and it is not sustainable. I can’t say for sure, but I have a feeling this culture extends to all developed and economically stable countries across the globe. That’s a huge market for cheap, poorly made goods that corporations will continue to capitalize on.
What if you were a CEO?
We have established that these business practices are unethical and unsustainable, but now let’s discuss the most important point: Businesses choosing to operate this way are directly responding to the choice by consumers to consistently buy the cheapest available products. Let’s do a little thought experiment. Pretend you are the CEO of a business and you have a product to sell.
This product can be made with care and high-quality materials. It can be designed to last and your workers can be paid fair wages. However, this makes the product cost $5. This is more expensive than its competitors that cost $3.
The product can also be made with low quality materials and cheap labor. It can be designed to be used a couple of times then thrown away. This will make the product $3, which will make it competitively priced.
While you are pondering this decision, you get a call from a colleague saying they have identified an opportunity to outsource manufacturing of your product which will lower the cost to $2.50. This would give you a competitive edge against other products – cheaper products of similar quality to more expensive alternatives nearly always sell better.
See how your thought process would go? Most CEOs would opt for the cheap product and outsourced labor to get the competitive edge. As long as cheap products are the preference of most of consumers, this is how the world will work. Money drives nearly every decision in business, because the purpose of a business is to make money.
What if you were an ethical CEO?
Now let’s take it a step further and pretend you are an ethical CEO who believes in sustainable business practices and wants to do the right thing for people and the environment. In that case, you’d most likely opt to create the high quality product that provides fair wages for your employees. Where does that leave you?
If we were still in the 2000s, this would put you in a bad place. The fact of the matter is that most consumers at that time did not want to pay extra money for more ethical/sustainable products. There was less demand for this type of product, so there was also less supply.
However, times are changing. A survey done in 2015 by Nielson Corporation, a global marketing firm, suggests that 66% of consumers are willing to pay more for products from companies that have a positive social and environmental impact. Furthermore, this study states that numbers jumped from 50% in 2013 to 55% in 2014.
Remember, this is just one study completed by one marketing firm. Just like in elections, surveys aren’t always the most reliable due to biases within the samples of people chosen to gather data from. Keeping this in mind, it is likely that these numbers are higher than the true percentage of people who are willing to pay more for sustainable goods. Even so, we can certainly ascertain that there is growth in demand occurring.
How Young People are Shaping the Demand for Sustainable Goods
Now that we are in 2020, climate change and plastic waste are at the forefront of conversations in business, politics, and daily discussions. Nowadays, it is widely agreed upon that somewhere close to half of consumers are willing to pay more for sustainable and ethical products.
Millenials and Zoomers (members of Gen-Z) are being grouped together in many studies, showing much higher percentages of young people are willing to pay more for sustainable products. One study by Nielson states that 73 percent of Millenials are willing to pay more for sustainable products. Forbes recently published an article arguing that Gen-Z is leading the pack in sustainable retail.
If you do a quick Google search on either of these subjects, you’ll find a lot of discourse on this very topic just within the past year or two. The same way we always hear about young people driving department stores like J. C. Penney and Sears out of business, we are beginning to hear about young people doing the same for unethical and unsustainable companies.
Go Forth and Support Ethical and Sustainable Companies
The proof is in the pudding guys – change can happen, and young people are driving it by shaping demand for sustainable products. You have two choices: be a part of the movement for ethical and sustainable manufacturing or keep doing the easy thing and putting zero thought into the products you buy.
As long as we keep mindlessly consuming cheap, unethical products, corporations will keep making them. It’s simple supply and demand. To truly force change, we must cut off demand for unsustainable, unethical, irresponsible products.
Now that you know that mindful consumption is the key to driving change, I hope that you will choose to put in a little extra work and learn about what the companies you buy from stand for. There are sustainable and ethical options for nearly every product out there, and your support (monetary or moral) is what keeps the companies that make them growing. All it takes to help drive demand for unsustainable products down is a little research and forethought before you make a purchase. Now go forth, be a mindful consumer, and vote with your dollar!